WASHINGTON (AP) — U.S. tariffs on Chinese goods are going up. Wait, President Donald Trump says he’s having second thoughts. No, no, Trump may actually raise tariffs even higher. He’s also demanding that U.S. companies leave China. Well, maybe not.

The communications on China from Trump and his administration since late last week — erratic, sometimes contradictory — are complicating their high-stakes talks with Beijing and elevating the risks to the fragile global economy.

The messaging has been confusing not just for Chinese officials as they formulate a response to whatever stance the administration is taking. It’s also a problem for American businesses. Trump alarmed U.S. companies on Friday by threatening to invoke his presidential authority to order them out of China — a market of 1.4 billion where many American companies have spent decades establishing operations and building relationships with suppliers and customers.

The shifting positions and threats could eventually weaken the U.S. and world economies by leaving businesses paralyzed by uncertainty over whether and where to situate factories, buy supplies and sell products.

“We are on Mr. Trump’s Wild Ride,” said Jay Foreman, CEO of Basic Fun!, a toy company in Boca Raton, Florida, that imports from China. “Never have we ever experienced such an unhinged practice of governance. It’s out of control and outrageous.”

Speaking Monday at the Group of Seven summit in Biarritz, France, Trump was unapologetic.

“Sorry — it’s the way I negotiate,” he said, adding, “It has done very well for me over the years, and it is going very well for the country.”

Negotiating a trade deal with China was always bound to be contentious and subject to fits and starts. The administration has accused Beijing of stealing trade secrets, extracting technology from U.S. companies and unfairly subsidizing its own businesses, and has demanded that it stop. What makes a resolution so elusive is that the administration’s demands would undercut China’s drive to achieve prosperity as the global leader in such transformative technologies as artificial intelligence and quantum computing.

Trump’s negotiators are also seeking a way to enforce any deal — arguing, as many independent analysts have, that China frequently violated commitments it made to previous U.S. administrations.

The world’s two biggest economies have imposed tariffs on hundreds of billions of dollars of each other’s goods in the biggest trade conflict since the 1930s. The hostilities have hurt global trade and investment and strained the decelerating world economy.

“Trump’s contradictory statements and erratic decision-making reflect the fact that he is an undisciplined, tactical thinker who deals with issues and events one-by-one and is guided by no fixed principles or long-term strategic vision,” said Jeff Moon, a former U.S. diplomat and trade official specializing in China who is now president of the China Moon Strategies consultancy.

Beijing’s negotiators are reluctant to make commitments in the face of what they see as Trump’s shifting demands, say economists and businesspeople.

After talks between the two sides collapsed in May, Trump accused Beijing of backtracking on its offers of regulatory changes and market-opening steps. Analysts suggested that Beijing was loath to make commitments without knowing whether the administration would soon make new demands.

“This constant flip-flop definitely makes it very hard for the other side to figure out what the American government actually wants,” said Joerg Wuttke, president of the European Union Chamber of Commerce in China, which represents 1,600 companies.

Wuttke suggested that Beijing’s approach is better coordinated, “whereas I see, Trump has a good day, bad day and, again, no strategy behind it.”

He said Trump’s approach to decision-making reminds him of Mao Zedong, whose impulsive policies kept China in chaos for much of the ’60s and ’70s. Like Mao, Wuttke said, “Donald Trump is disruptive. The Chinese cannot figure out what he wants. … It causes uncertainties. Uncertainty causes investment delay. It causes supply chain rearrangement.”

Chinese negotiators might be losing faith in Trump’s willingness to make a deal and stick to it, agreed Tu Xinquan, director of the China Institute for WTO Studies at the University of International Business and Economics in Beijing.

“We used to have expectations for Trump,” Tu said. “We hoped he was a businessman, more rational and less entangled in political issues. But now it seems his degree of rationality is far below our expectations. Constantly changing. The overall situation is getting worse. Simply put, we have no expectations now and don’t expect him to make the right responses and decisions.”

Chinese negotiators might have taken note, too, of Trump’s trade talks with Mexico. Pressured by U.S. tariffs, the Mexican government yielded last year to Trump’s demand to renegotiate a North American free-trade agreement. Yet just as trade between the two seemed to be normalizing, Trump suddenly threatened to impose new taxes on all Mexican goods. He was frustrated, he said, that Central American migrants were crossing Mexico en route to the U.S. (Trump dropped the tariff threat once Mexico agreed to do more to stop the migrants.)

In the meantime, Trump’s tariffs against Beijing and the uncertainty surrounding them are troubling U.S. businesses that have built complex supply chains in China or that rely on Chinese imports. Their worries are one reason U.S. businesses’ capital investment fell in the April-June quarter for the first time in three years.

“U.S. businesses will have to deal with his unique and what we believe to be consciously disruptive style of policy making for at least another 17 months,” Nomura’s economists wrote in a research note Sunday. “During this period we think U.S. businesses will, at the margin, hesitate to make major strategic decisions. … We expect this uncertainty to be a further drag on investment, hiring, and growth in coming quarters.”

As the United States and China continue to increase tariffs on one another, China has been dethroned by Mexico as the U.S.’s No. 1 trading partner.

Arizona’s southern neighbor found its way to the top amid continued uncertainty about our trade policy with China. Trade-in goods with the Asian nation fell sharply in the first half of the year as U.S. imports from China decreased by 12 percent compared to a year earlier. Exports to China were also down by 18 percent, according to data released by the Commerce Department.

Mexico ranks first in terms of the total overall value of goods traded with the United States, with Canada coming in at number two and China in third. In recent months, President Trump has wanted to limit the trade deficit the U.S. has with China. That deficit shrunk by about 10 percent to $180 billion from $200 billion.

The top imports from Mexico include computers, motor vehicle parts, commercial vehicles, oil, produce, and commuter vehicles. Mexico recorded $557 billion in trade with the U.S. in the latest annual figures.

Representatives from Washington and Shanghai went through another round of trade talks in July to no avail as President Trump said he would impose 10 percent tariffs on another $300 billion in Chinese imports starting on September 1. New talks are scheduled for September in Washington. Until then, Mexico will be sure to enjoy its reign as the biggest trading partner with the U.S.

“Businesses keep doing the right thing for the most part, and executives on both sides are looking more at the markets than the politicians for guidance. That said, politicians are both helping and hurting,” Doug Bruhnke, CEO/founder of the Global Chamber said. “We can withstand lots of hot air from the politicians, and we’ll navigate the world because we have to. Eighty-five percent of new business is outside the U.S. in the next 5 years and so companies recognizing the opportunity are reaching new markets all over the world to capture opportunity.”

The Trump administration added tariffs on $250 billion worth of Chinese imports this year and in addition to the new tariffs set to begin September 1st. In response, China has placed tariffs on $110 billion worth of U.S. goods.

“China will leverage some of the world against U.S. manufacturers, and so this is extremely troubling for the U.S. in the long term,” Bruhnke said. “The pain has only just begun. U.S. exporters are already scrambling in agriculture and other industries to find alternative markets for export.”

Mexico, on the other hand, has steadily increased trade with the United States. Trade with the U.S. rose to $257.72 billion through the first five months of this year, which represents 3.6 percent above its total trade during the same period last year. Exports from the U.S. to Mexico decreased by .42 percent while imports from Mexico ticked up 6.74 percent, according to data from the U.S. Census Bureau.

WASHINGTON (AP) — Congressional Democrats appear to be moving from “no way” to “maybe” on President Donald Trump’s rewrite of a trade pact with Canada and Mexico.

House Democrats have met four times with U.S. Trade Representative Robert Lighthizer, most recently on Friday, and both sides say they are making progress toward a deal that would clear the way for Congress to approve Trump’s U.S.-Mexico-Canada Agreement, or USMCA.

Democratic Rep. Earl Blumenauer of Oregon, who heads a House subcommittee on trade, declared a couple of months ago that there was “no way” Democrats and the administration could bridge their differences. Lately, he’s reconsidered. “In the course of the last two months, we have seen significant progress,” Blumenauer said.

Negotiators so far have not offered details on where they’re making progress. Democrats want the agreement to include stronger protections for workers and the environment. They also are seeking to jettison a provision they see as a giveaway to big pharmaceutical companies.

Talks could still fall apart. Meetings between congressional staffers and officials from Lighthizer’s office during Congress’ August recess could prove critical. House Democrats working on USMCA will submit text next week to the administration “memorializing the concrete and detailed proposals that we have made.”

They called on the administration to do the same.

“It is time for the administration to present its proposals and to show its commitment to passing the new NAFTA and delivering on its own promises,” the Democratic lawmakers said.

Supporters of USMCA are pushing for a deal before the 2020 election campaign heats up, which could make it harder for Democrats and Republicans to compromise.

A senior administration official, who spoke on condition of anonymity to discuss internal deliberations, said there was growing optimism within the administration about USMCA’s prospects amid signs that House Speaker Nancy Pelosi was willing to work toward a compromise.

“The smart money in Washington is that USMCA will pass this fall following a bargain,” said Daniel Ujczo, a lawyer with Dickinson Wright in Columbus, Ohio, who specializes in North American trade. “However, it is just as likely that we will be in a ‘bump and blame’ scenario where the president can blame Speaker Pelosi and Speaker Pelosi can blame the president.”

By ratifying the agreement, Congress could lift uncertainty over the future of U.S. commerce with its No. 2 (Canada) and No. 3 (Mexico) trading partners last year and give the U.S. economy a modest boost. U.S. farmers are especially eager to make sure their exports to Canada and Mexico continue uninterrupted.

Rep. Cheri Bustos of Illinois, who oversees efforts to get Democrats elected to the House, said Pelosi “understands the sense of urgency” about USMCA among some lawmakers who represent rural districts.

“The hope is that we can get to a yes,” Bustos said. “But first and foremost, it has to look out for working men and women in our country.”

The USMCA is meant to replace the 25-year-old North American Free Trade Agreement, which eliminated most tariffs and other trade barriers between the U.S., Mexico and Canada. Critics — including Trump, labor unions and many Democratic lawmakers — called NAFTA a job killer for America because it encouraged factories to move south of the border, take advantage of low-wage Mexican workers and ship products back to the U.S. duty free.

Lighthizer last year negotiated a do-over with Canada and Mexico. But it requires congressional approval.

He sought to reach a deal that would win over Democrats. It includes provisions designed to nudge manufacturing back to the United States. For example, it requires that 40% to 45% of cars eventually be made in countries that pay autoworkers at least $16 an hour — that is, in the United States and Canada and not in Mexico.

Vice President Mike Pence highlighted the carmaker provisions during a speech Tuesday in Lancaster, Ohio, where officials are beginning construction of a car seat manufacturing plant. He’s been traveling to states the Trump administration believes would most benefit from a new agreement.

I mean, this state has so much to gain from the USMCA,” Pence said. “And so, for Ohio, for the automotive industry, and for America, we’ve got to get the USMCA done. And we got to get it done this year. ”

But Democrats say it still doesn’t go far enough.

Democrats are also lined up against a provision of USMCA that gives pharmaceutical companies 10 years’ protection from cheaper competition in a category of ultra-expensive drugs called biologics, which are made from living cells. Shielded from competition, critics warn, the drug companies could charge exorbitant prices for biologics.

Congress is supposed to give trade agreements an up-or-down vote, no amendments allowed.

The reality is different. Despite those so-called fast-track provisions, Congress has managed to pressure past administrations into making changes to the last four U.S. free-trade agreements before approving them.

The trade pact picked up some momentum after Mexico in April passed a labor-law overhaul required by USMCA. The reforms are meant to make it easier for Mexican workers to form independent unions and bargain for better pay and working conditions, narrowing the gap with the United States.

Mexico ratified USMCA in June. But Democrats are also watching whether Mexico budgets enough money later this year to provide the resources needed for labor reform.

In Washington, lawmakers are getting pressure from all sides. Business and farm groups want the new deal approved as soon as possible.

Meanwhile, labor, environmental and other activist groups last month declared a “No Vote Until NAFTA 2.0 is Fixed” day and collected 300,000 signatures on petitions demanding changes to the trade pact.

“The only way forward is making the fixes,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

Trump has repeatedly threatened to withdraw from the existing NAFTA — it remains in effect — if Congress won’t OK his version. But analysts say that pulling out of NAFTA would squeeze automakers and farmers.

“The president knows that his voters here in the heartland and manufacturing Midwest cannot take another hit — we hope,” Ujczo said.

Charger Logistics’ new state-of-the-art facility in Laredo is up and running. The company aims to double its business in Mexico and grow overall capacity by 200 trucks and manage 600 trailers at the location.

Charger Logistics, which has its United States headquarters in Indiana, will use the new Laredo facility to serve as the company’s headquarters in the south, officials said.

“The new facility is the foundation for our growth in the Mexico market,” said Andy Khera, the company’s president and chief executive officer. “We really want to see our operations double here in the next year – it is a direction we are going to go in, a direction we are going to work hard towards.”

The Charger Logistics facility is located on 30 acres at 13620 Evolution Loop, just off Interstate 35 in Laredo. It includes a 15,000-square foot repair and maintenance bay, a 24,000 square-foot cold storage warehouse and an 80,000-square foot dry-freight warehouse. Charger Logistics does all the repairs and maintenance on its truck fleet in-house, officials said.

Khera said the company averages around 150 shipments daily in and out of Mexico, but seeks to double that number within a year. Charger Logistics moves a diversified service offering of goods into and out of the Mexico cross-border market, everything from produce to manufactured goods, to chocolate.

“We do a lot of dry van work, but the need for refrigeration is also big in Laredo. That is why the new facility has the 24,000 square-foot cold storage warehouse,” Khera said.

Charger Logistics also plans to employ up to 150 people at the site, including operations managers, warehouse workers, drivers and mechanics.

Khera said the tariff threats against Mexico and President Donald Trump’s trade negotiations with Canada and China have created challenges in the past year, but Charger Logistics remains committed to growing its Mexico operations.

“Our company started around 2003, but we have had shipments in and out of Mexico since 2008,” Khera said. “The overall vision of the new facility is to provide better facilities for our drivers and increase our ability to work with our partners in Mexico and really take advantage of the growth in the market.”

Port Laredo’s trade totaled $20.66 billion for the month of May, $96.71 billion through May of 2019 and $234.66 billion for all of 2018, the latest annual data available, according to U.S. Census Bureau data analyzed by WorldCity. Laredo’s World Trade and Colombia Solidarity bridges carry around 12,000 trucks across the border every day.

Laredo Mayor Pete Saenz called Charger Logistics’ new facility a “North American Free Trade Agreement (NAFTA) success” and a “United States-Mexico-Canada Agreement (USMCA) success.”

The United States-Mexico-Canada Agreement is an updated version of NAFTA. The USMCA still needs to be ratified by the U.S. and Canadian legislatures.

“We’re proud to say that [Charger Logistics] chose Laredo as a hub for its business. This means employment and a great deal of prosperity for many people in Laredo,” Saenz said.

MEXICO CITY (Reuters) – The U.S. Chamber of Commerce on Monday criticized the Mexican state-owned power utility CFE’s filing with an international court to begin arbitration with several infrastructure companies over pipeline contracts, saying the move could undermine investor confidence.

The CFE [COMFEL.UL] said last week it would aim to negotiate a “fairer” outcome to contract disputes with several companies through a mediation process overseen by the London Court of International Arbitration.

The infrastructure firms include Mexican companies Fermaca, Grupo Carso and IEnova, a subsidiary of U.S.-based Sempra Energy, as well as Canada’s TC Energy Corp.

The London arbitration court could not immediately be reached for comment.

The U.S. Chamber of Commerce said in a statement on Monday that it was concerned by the move, stressing the importance of legal certainty to secure foreign investment.

“This action risks sending a negative signal to U.S. and other international investors about the business and investment climate in Mexico,” the group said. “We therefore urge CFE and the Government of Mexico to reconsider this decision and to observe the president’s pledge to honor the sanctity of existing contracts.”

The group did not detail what action it wanted CFE to take.

CFE began talks with pipeline builder Fermaca on Monday as part of a push to negotiate independently with the companies, CFE spokesman Luis Bravo said.

“All the companies have agreed to talk about the contracts. Today we met with Fermaca to determine how to negotiate,” CFE spokesman Luis Bravo said. The talks will take place in parallel to the process in international arbitration court, he added.

Fermaca could not be reached for comment.

Mexican President Andres Manuel Lopez Obrador has pushed back against criticism of the arbitration request, saying the terms of the agreements were “abusive” toward the state.

The U.S. chamber has repeatedly come to Mexico’s defense during U.S. President Donald Trump’s administration, defending the North American Free Trade Agreement when Trump threatened to kill the deal and urging the United States to exempt Mexico and Canada from steel and aluminum tariffs.

The CFE’s pursuit of arbitration has sparked criticism from others in the international community. Canada raised concerns about the dispute, and Moody’s said the spat was “credit-negative” for the utility, the companies involved and the sector as a whole.

Mexico’s June 19 approval of the United States-Mexico-Canada Agreement brings the updated version of the North American Free Trade Agreement one important step closer to ratification.

While the U.S. Congress may not vote on the trade agreement in the next few weeks, Richard Owen, vice president of global business development at the Produce Marketing Association, said lawmakers may act by late summer.

“I do think there is a window to have it come up before Congress recesses in August,” Owen said.
Owen said Mexico’s approval has added motivation for the U.S. and Canada to act.

Now that President Trump’s imports tariffs on Canadian and Mexican steel and aluminum have been lifted — combined with the fact that Trump’s threatened tariffs on imports of Mexican goods tied to immigration enforcement were avoided — Owen said the major obstacles for USMCA approval were removed.

“We would like to see it come up for a vote and get approved as quickly as possible,” he said.

Owen said he doesn’t believe the administration’s May termination of the tomato suspension agreement between Mexican tomato growers and the Commerce Department will have any effect on the vote by Congress.

What’s more, the desire by some U.S. growers for seasonal trade protection against imports from Mexico also is unlikely to hinder the deal, he said.

“I think the administration at this point would want to keep the agreement pretty clean,” Owen said.
Even so, some lawmakers were urging the administration to keep the seasonality provision out of USMCA.

Sen. Martha McSally, R-Ariz., penned a letter urging the administration to protect American consumers and farmers by keeping a “seasonality” provision out of the United States-Mexico-Canada Agreement.

In a letter sent to U.S. Trade Representative Ambassador Robert Lighthizer, McSally and other lawmakers from Arizona, Texas, and California express their opposition to the inclusion of any seasonality provision in legislation implementing the USMCA, according to a news release.

“Cross-border commerce with Mexico is critical to Arizona’s economy and workforce,” McSally said in a news release. “Any seasonality provision incorporated into the USMCA would negatively impact Arizona’s hardworking families with higher costs at the grocery store and dinner table. I have expressed my opposition to such a provision to the administration and will continue to fight for Arizona jobs and families.”

On June 14, the U.S. International Trade Commission published a notice in the Federal Register that said the group was resuming of the final phase of anti-dumping investigation to determine whether U.S. tomato growers were materially injured because of imports of fresh tomatoes from Mexico, preliminarily determined by the Department of Commerce to be sold at less than fair value. The commission said a timeline for the final phase of this investigation will be issued later.

Congress will soon decide whether to ratify the United States-Mexico-Canada Agreement, the trade Opens a New Window. deal that would update NAFTA in several ways. Most importantly, the new pact would significantly strengthen intellectual property Opens a New Window. rights.

It’s hard to overstate the value of IP rights to America’s economy. The U.S. Patent and Trademark Office reports that IP-intensive industries account for 45.5 million U.S. jobs and more than $6 trillion in GDP.

Without strong IP rights, the industries that enhance our lives would cease to function. Congress can set the stage for years of job creation and economic growth by ratifying the United States-Mexico-Canada Agreement (USMCA).

Innovation isn’t cheap or easy. This is especially true in my industry of biopharmaceuticals. It costs an average of $2.6 billion and often takes more than a decade to develop just one new medicine.

By patenting their drug designs, biopharmaceutical firms can prevent rivals from creating knockoff medicines for a limited time. That enables innovative firms to earn a return on investment and plow the revenues into new lines of research, leading to yet more innovation.

Today, the biopharmaceutical sector supports 4.7 million American jobs and contributes more than $1.3 trillion a year to the economy — none of which would be possible without our nation’s strong IP protections.

Other IP-intensive sectors have similarly impressive statistics. Copyright industries support 5.7 million jobs, while the tech industry employs 6.7 million.

Importantly, these creative industries produce the majority of American exports, which help reduce the trade deficit. These sectors account for about $840 billion in merchandise exports and another $80 billion in service exports annually.

The USMCA contains numerous intellectual property provisions. For instance, the deal would create a Committee on Intellectual Property Rights. Representatives from each country would work together to boost enforcement of IP rights and improve transparency in issues concerning trade secrets.

That’s a necessary reform to prevent IP theft. By one estimate, the sale of counterfeit American goods costs our economy $29 billion a year. Stolen trade secrets, meanwhile, cost businesses and workers $180 billion.

The USMCA also includes critical protections for sophisticated drugs known as “biologics,” which represent some of the most promising cures of the future. Policies like these will preserve the incentive for American individuals and companies to innovate and protect them from IP theft.

American, Canadian, and Mexican leaders already finalized the terms of the USMCA back in November, but Congress hasn’t yet approved the deal. There’s little reason to wait.The USMCA would give the nation’s most innovative and creative industries the security they need to create jobs and grow our economy. Passing it is a no-brainer.

President Donald Trump’s tariff threats against Mexico are harming the Americas, Miguel Basanez, former Mexican ambassador to the U.S., told CNBC on Wednesday.

They are also bolstering another U.S. trade foe, he added.

The 5% duties on all Mexican imports are set to take effect Monday and are expected to gradually rise to 25% by October.

“What he is doing, he is weakening the economic zone of the Americas and he’s weakening the economic area of Europe, ” Basanez said in an interview with “The Exchange. ” “Then what he’s doing is strengthening China. ”

The U.S. and China have been engaged in an escalating trade war, with each country upping tariffs on the other.

But Trump’s latest target is Mexico. In a surprise move last week, the president said he was imposing the tariffs to stop immigrants from coming through Mexico and crossing illegally into the U.S. The announcement came just as the approval process for the new trade agreement between the U.S., Mexico and Canada started to get underway.

However, White House trade advisor Peter Navarro said earlier Wednesday on CNN that the tariffs “may not have to go into effect,” depending on the outcomes of talks scheduled between a Mexican delegation and Vice President Mike Pence Wednesday afternoon.

“We believe that these tariffs may not have to go into effect precisely because we have the Mexicans’ attention,” Navarro said.

Republican senators have also signaled they oppose the duties.

Basanez said the impact of the potential tariffs are already being felt in the Mexican currency, the peso. It plunged against the U.S. dollar after the tariff announcement, erasing all of its 2019 gains, but has since pared some of those losses.

“That’s the reason why the delegation of Mexicans is up there rather than just ignoring” Trump’s threats, he said.

However, there could also be another result from the latest trade tiff.

“What President Trump is doing is pushing Mexico to start talking to China,” Basanez said. “If he really goes on with his threat, Mexico will have not much options.”

The president who is in Ireland, said Wednesday that he thinks Mexico wants to make a trade deal, but if it does not stop the control of migrants, the levies will go into effect.

“Mexico can stop it. They have to stop it, otherwise we just won’t be able to do business. It’s a very simple thing. And I think they will stop it. I think they want to do something. I think they want to make a deal, and they sent their top people to try and do it,” Trump said.

However, seven former U.S. ambassadors to Mexico warned in a CNBC op-ed Wednesday that the tariffs could not only damage the economies of the U.S. and Mexico, but may make the migrant issue even worse. “Damaging Mexico’s economy will cripple its capacity to tackle migrant flows as well as the economic growth that contributed to ‘net zero’ Mexican migration to the U.S. today,” they wrote.

The White House did not immediately respond to a request for comment on Basanez’s remarks.

Mexico’s economy contracted by 0.2 percent in the first quarter of the year, revised government data confirmed Friday, a rough start for new President Andres Manuel Lopez Obrador.

The contraction raises the specter of recession just months into the anti-establishment leftist’s six-year term, threatening his promise to “transform” the country and deliver average annual GDP growth of four percent.

The revised number for January to March was the same as the preliminary figure released in April, which took economic analysts by surprise and triggered talk of a possible recession — two or more consecutive quarters of contraction — in Latin America’s second-largest economy.

Mexico’s economy registered zero growth in the fourth quarter of 2018, according to the national statistics institute, INEGI.

Lopez Obrador — widely known as “AMLO” — downplayed the data.

“There’s still time” to reach his target of two-percent growth for 2019, he told a press conference.

MEXICO CITY • Ikea, the world’s largest furniture seller, will open its first store in Mexico next year and plans to launch other stores around the country, the company said on Wednesday, as it expands in Latin America to counter growing competition in its core US and European markets.

The Swedish chain, known for its modern and inexpensive designs, will open a store in eastern Mexico City in autumn next year and also sell its products online, Mr Malcolm Pruys, the country retail manager for Ikea Mexico, said at an event in the capital.

Ikea also plans to target a number of other cities of varying sizes throughout the country, he added in an interview. “We’re setting a reasonably aggressive expansion plan,” he said.

The first store will be medium-sized, offering 7,500 products and a restaurant able to seat more than 650 people, with a warehouse off-site for e-commerce.

Ikea’s traditional model has called for vast warehouses on city outskirts packed with goods. But the retailer has recently developed compact formats, allowing it to branch into smaller cities, Mr Pruys said.

Ikea has 427 stores across 52 markets. Stores in Europe and the United States drive the majority of sales for Inter Ikea Group and its franchisees, but rival retailers, especially online, are increasingly vying for shoppers.

Late last year, Ikea announced plans to enter Latin America, including Chile, Colombia and Peru.

The plans to launch in Mexico began four years ago. On Wednesday, several Ikea executives met Mexican President Andres Manuel Lopez Obrador, who was pleased by Ikea’s confidence in Mexico, Mr Pruys said.

“There is great movement in Mexico around cleaning up corruption,” he said. “We think there’s a big opportunity for Mexico’s economy to continue to grow.”

Ikea is working on plans for a variety of payment options for online shopping, aiming to reach Mexico’s vast unbanked population, he added.